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Sandra C. Barkley v. United Homes

January 27, 2011

SANDRA C. BARKLEY, PLAINTIFF,
v.
UNITED HOMES, LLC, UNITED PROPERTY GROUP, LLC, YARON HERSHCO, GALIT NETWORK, LLC, OLYMPIA MORTGAGE CORP., AND BENJAMIN TURNER,
DEFENDANTS.
MARY LODGE,
PLAINTIFF,
v.
UNITED HOMES, LLC, UNITED PROPERTY GROUP, LLC, YARON HERSHCO, GALIT NETWORK, LLC, OLYMPIA MORTGAGE CORP., BAYVIEW LOAN SERVICING, LLC, BAYVIEW ASSET MANAGEMENT, LLC, U.S. BANK, N.A., AS TRUSTEE FOR BAYVIEW ASSET-BACKED SECURITIES TRUST SERIES 2007-30, AND BAYVIEW FINANCIAL MANAGEMENT CORP., DEFENDANTS. DEWITT MATHIS,
PLAINTIFF,
v.
UNITED HOMES, LLC, UNITED PROPERTY GROUP, LLC, YARON HERSHCO, GALIT NETWORK, LLC, AND ALLIANCE MORTGAGE BANKING CORP., DEFENDANTS.
SYLVIA GIBBONS AND SYLVIA GIBBONS, AS ADMINISTRATOR OF THE ESTATE OF RODNEY GIBBONS, PLAINTIFFS,
v.
UNITED HOMES, LLC, UNITED PROPERTY GROUP, LLC, YARON HERSHCO, GALIT NETWORK, LLC, AND OLYMPIA MORTGAGE CORP., DEFENDANTS.
MILES MCDALE AND LISA MCDALE,
PLAINTIFFS,
v.
UNITED HOMES, LLC, UNITED PROPERTY GROUP, LLC, YARON HERSHCO, GALIT NETWORK, LLC, ALLIANCE MORTGAGE BANKING, CORP., AND BENJAMIN TURNER,
DEFENDANTS. CHARLENE WASHINGTON, PLAINTIFF,
v.
UNITED HOMES, LLC, UNITED PROPERTY GROUP, LLC, YARON HERSHCO, GALIT NETWORK, LLC, AND ALLIANCE MORTGAGE BANKING CORP.,
DEFENDANTS.



The opinion of the court was delivered by: Matsumoto, United States District Judge:

MEMORANDUM AND ORDER

Plaintiffs Sandra Barkley, Mary Lodge, Dewitt Mathis, Sylvia Gibbons, Sylvia Gibbons as the Administrator of the Estate of Rodney Gibbons, Lisa McDale, Miles McDale, and Charlene Washington (collectively "plaintiffs") commenced this action against United Homes, LLC; United Property Group, LLC; Galit Network, LLC (the "UH Defendants"); Yaron Hershco ("Hershco"); Olympia Mortgage Corp. ("Olympia")*fn1 (collectively "defendants"); and others, alleging that defendants engaged in a fraudulent property-flipping scheme wherein the UH Defendants acquired distressed, damaged, and defective properties in predominantly minority neighborhoods, made substandard and superficial repairs, and used racially targeted marketing strategies to sell the properties as "newly renovated" at substantially inflated prices, primarily to members of racial and ethnic minorities with little or no experience with homeownership and minimal financial acumen. Plaintiffs further alleged that the UH Defendants conspired with appraisers, attorneys, and mortgage lenders--including Olympia--in order to perpetrate the fraudulent scheme. Pursuant to Federal Rule of Civil Procedure 19, plaintiff Mary Lodge also named as necessary parties the servicer and holder of her First Note and Mortgage, Bayview Loan Servicing, LLC; Bayview Asset Management, LLC; U.S. Bank, N.A. as Trustee for Bayview Asset-Backed Securities Trust Series 2007-30; Bayview Financial, L.P.; and Bayview Financial Management Corp. (collectively, the "Bayview Defendants").

On May 9, 2011, jury selection and trial commenced in these actions. (ECF*fn2 Minute Entry dated 5/9/2011.) Prior to submitting the cases to the jury, the court granted plaintiffs' motion pursuant to Federal Rule of Civil Procedure 50(b) for judgment as a matter of law with regard to the Bayview Defendants' holder-in-due-course defense. (Tr. XV at 133.) After three weeks of trial, on June 1, 2011, the jury found the UH Defendants, Hershco, and Olympia liable for engaging in deceptive practices in violation of Section 349 of New York General Business Law, fraud, and conspiracy to commit fraud, and awarded compensatory and punitive damages. (ECF Minute Entry dated 6/1/2011; ECF No. 566, Jury Verdict ("Verdict").) The jury found the UH Defendants, Hershco, and Olympia not liable on plaintiffs' discrimination claims. (Verdict.)

Presently before the court are five post-trial motions by the parties. The court considers each motion separately. For the reasons set forth below, the court: (1) denies defendants' motions regarding interpretation of the jury verdict; (2) grants in part and denies in part defendants' motions for set-offs; (3) grants plaintiffs' motion for an award of interest; (4) grants plaintiffs' motion for a permanent injunction; and (5) denies plaintiff Mary Lodge's motion for injunctive relief to void her mortgage.

DISCUSSION

I.Defendants' Motions Regarding Interpretation of the Jury Verdict

A.Duplication of Damages

The UH Defendants and Hershco contend that "the verdict sheet's egregious inconsistencies and fundamental errors warrant correction before the Court reduces the verdict to judgment." (ECF No. 575, UH Defendants and Hershco Post-Verdict Motion #1 ("UH Jury Int. Mot.") at 1.) These defendants argue that because "[t]he verdict sheet shows that the jury awarded the same compensatory damages under both the fraud and civil conspiracy causes of action . . . [and] the plaintiffs introduced only one measure for damages for both counts . . . each plaintiff should be entitled to only one recovery." (Id. at 2.) Specifically, the UH Defendants and Hershco argue that "a plaintiff seeking compensation for the same injury under different legal theories is . . . entitled to only one recovery." (Id. (internal quotations and citation omitted).)

Moreover, these defendants contend that "the civil conspiracy count is nothing more than an element of the fraud count and therefore cannot support an independent damage award." (Id. at 3.) The UH Defendants and Hershco rely on a recent decision by the New York Appellate Division, Hoeffner v. Orrick, Herrington & Sutcliffe LLP, 924 N.Y.S.2d 376 (N.Y. App. Div. 2011), to support their argument that the conspiracy-to-defraud claim cannot sustain an independent measure of damages. (Id.) Finally, the UH Defendants and Hershco argue that "defendants have raised this issue well before the jury considered it, both in its summary judgment motion and pre-trial memorandum, and during the trial." (Id.)

Olympia contends that the jury correctly placed "the same figure in the verdict sheet under both . . . fraud and conspiracy to defraud . . . because the amount of damages caused by a conspiracy to defraud are necessarily the same amount as caused by the underlying fraud." (ECF No. 576-2, Olympia Memorandum of Law Concerning Interpretation of Jury Verdict ("Olympia Jury Int. Mem.") at 1.) Additionally, Olympia argues that "the conspiracy to defraud claim exists, and can only exist, because of the underlying fraud claim," and thus "for the jury to have found that the conspiracy to defraud caused monetary damages that were not caused by the fraud would be illogical and completely contrary to the law." (Id. at 2-3.)

Plaintiffs oppose the motions concerning the interpretation of the jury verdict, arguing that defendants have failed to meet their burden to show that the jury has, in fact, duplicated damages. (ECF No. 585, Plaintiffs' Opposition to UH Jury Int. Mot. and Olympia Jury Int. Mot. ("Pl. Jury Int. Opp'n") at 2.) Specifically, plaintiffs contend that it is not enough for defendants to simply assert "that [the jury] allocated the damages under two different causes of action" and that "[t]he mere possibility of non-duplicative awards is enough to sustain the jury verdict." (Id. at 2-3 (internal quotations and citation omitted).) Plaintiffs assert that "in light of the various sources of plaintiffs' damages and the increased severity of those damages because of the conspiracy, the jury correctly determined that the plaintiffs suffered damages for fraud and conspiracy to defraud." (Id. at 4.) Moreover, plaintiffs argue, "[e]ven if a jury could not award additional damages for conspiracy . . . it is reasonable to assume that the jury simply divided the damages for fraud between the two lines provided them on the verdict form." (Id.) Finally, plaintiffs argue that "defendants' failure to object to the verdict form, or to ask that the jury be polled to clarify any perceived duplication of damages, is fatal to their current arguments" because such failure "waived their right to raise" the issue. (Id. at 5, 8.)

The UH Defendants and Hershco reply that the cases upon which plaintiffs rely in their opposition "do not support their argument that the jury's duplicate awards under fraud and civil conspiracy theories should be allowed." (ECF No. 581, UH Defendants and Hershco Reply on Motion Concerning Verdict Sheet ("UH Reply") at 1.) Specifically, the UH Defendants and Hershco contend that in each of the cases cited by plaintiffs, "the jury was either explicitly instructed not to award duplicative damages or was polled afterwards to determine intent," and thus those cases are inapplicable here. (Id. at 4.) Further, these defendants argue that plaintiffs "continue to conflate theories of liabilities with damage," noting that although "plaintiffs contend they established a 'variety' of damages . . . they only established one injury." (Id.) Finally, in response to the argument that defendants waived their objection to the verdict sheet or polling of the jury, the UH Defendants and Hershco argue that "all of the defendants consistently and repeatedly objected to the plaintiff's civil conspiracy claim, which did not present a separate claim under New York law," and that "even a waived objection to a verdict sheet will not justify sustaining an obviously erroneous verdict." (Id. at 5.)

Olympia similarly replies that "[n]one of the cases cited [in plaintiffs' opposition] address [the] issue that a conspiracy to defraud cannot sustain an independent award of damages." (ECF No. 587, Olympia Reply Memorandum of Law Concerning Interpretation of the Jury Verdict ("Olympia Reply") at 2.) Olympia further argues that "there is no possibility of non-duplicative damages because, as a matter of law, New York simply does not permit additional damages to be awarded on a conspiracy to defraud claim." (Id.) Olympia contends that although plaintiffs originally claimed that the conspiracy-to-defraud claim "was not an independent claim but instead was merely an adjunct to their fraud cause of action . . . they [now] claim, the conspiracy to defraud claim can sustain its own damages separately from the fraud claim." (Id. at 3.) In response to the argument that defendants waived their objection to any duplicative damages, Olympia argues that "[p]laintiffs completely overlook the principal point made by Olympia" in that "[w]hat Olympia objects to on this motion is not the verdict sheet but rather to the manner in which Plaintiffs seek to interpret the jury's verdict." (Id.) Olympia contends that it did not need to poll the jury because "there was nothing to ask the jury about because the jury correctly interpreted the law: it held that the damages caused by the conspiracy to defraud were the same damages caused by the fraud." (Id.) However, Olympia asserts, even if an objection was necessary, it effectively objected by "repeatedly ask[ing] this Court to dismiss the conspiracy to defraud claim." (Id. at 5.)

1. Defendants Waived Any Objection to Duplicative Damages Despite defendants' contentions, it is not clear from the verdict sheet that the jury awarded duplicative damages, and as set forth below, it is doubtful that the jury did so. Even assuming, but not finding, that the jury awarded duplicative damages, the court agrees with plaintiffs that defendants waived their objection to any duplicative damages by failing to offer a jury instruction that they now claim should have been given, failing to object to the jury instructions or the verdict sheet, and failing to request that the jury be polled on the issue prior to discharging the jury. "The Second Circuit has frequently addressed waiver in cases involving challenges based on some logical inconsistency within a verdict," and although not directly on point to the issue of whether defendants waived an objection to duplicative damages, "the court finds this line of precedent useful in so far as it elucidates the general principles underlying the doctrine of waiver." Bseirani v. Mahshie, 881 F. Supp. 778, 784 (N.D.N.Y. 1995), aff'd, Nos. 95-9109, 95-9145, 1997 WL 3632 (2d Cir. Jan. 3, 1997).

"It is well established that a party waives its objection to any inconsistency in a jury verdict if it fails to object to the verdict prior to the excusing of the jury." Kosmynka v. Polaris Indus., Inc., 462 F.3d 74, 83 (2d Cir. 2006); see also Lavoie v. Pac. Press & Shear Co., 975 F.2d 48, 55 (2d Cir. 1992) ("Failure to object to a jury instruction or the form of an interrogatory prior to the jury retiring results in a waiver of that objection."); Jarvis v. Ford Motor Co., 283 F.3d 33, 56-57 (2d Cir. 2002) (quoting Lavoie, 975 F.2d at 55). "The requirement of a timely exception is not merely a technicality. Its function is to give the court and the opposing party the opportunity to correct an error in the conduct of the trial." Kosmynka, 462 F.3d at 83 (internal quotations and citations omitted); see also Bseirani, 881 F. Supp. at 784 ("Waiver is particularly appropriate where counsel is or should be aware of the inconsistency in the verdict, and where resubmission to the jury would resolve the ambiguity, because the purpose of waiver is to promote the efficiency of trials by allowing the original deliberating body to reconcile inconsistencies without resort to the presentation of evidence to a different body." (internal quotations and citations omitted)).

The Second Circuit has applied these same principles, which govern objections to inconsistencies in jury verdicts, to cases that address the waiver of duplicative damages objections. For example, in Metron Tech. Distrib. Corp. v. Discreet Indust. Corp., the Second Circuit held:

As to whether the jury awarded duplicative damages, defendants have waived any argument regarding the jury instruction or verdict sheet given their failure to raise this issue in their request to charge or at the charging conference, or to lodge a timely objection, or to request that the court poll the jury. 189 F. App'x 3, 4 (2d Cir. 2006). In Bseirani, the Second Circuit, citing Lavoie, held that because the defendant "did not object to the instruction on duplication grounds" or "seek clarification from the jury," his argument that the damages awarded by the jury were duplicative was waived. 1997 WL 3632, at *1-2. These cases, though unpublished, provide guidance in applying the doctrine of waiver to duplicative damages objections.

Here, defendants raise the duplicative damages issue for the first time in their post-trial motions. All parties had multiple opportunities to submit proposed jury instructions and proposed verdict sheets prior to trial and prior to charging the jury. Yet the UH Defendants, Hershco, and Olympia all failed to request a jury instruction that specifically addressed the risk that the jury might award duplicative damages for fraud and conspiracy to defraud. The court notes that although the UH Defendants and Hershco originally requested a general instruction concerning duplicative damages, they withdrew the request in their amended proposed jury charges and did not raise the issue at the charging conference or with respect to the proposed verdict sheets. (Compare ECF No. 540, Proposed Jury Instructions by UH Defendants and Hershco, with ECF No. 543, Amended Proposed Jury Instructions by UH Defendants and Hershco.) Olympia completely failed to submit any requests for jury charges or a proposed verdict sheet prior to trial, as ordered. Indeed, Olympia submitted no requests until the last week of the three-week trial, and on May 26, 2011, requested only one instruction relating to the knowledge element of the conspiracy-to-defraud charge. (See Tr. XIV at 34-38, 92-98; ECF No. 565, Plaintiffs' and Defendants' Supplemental Proposed Jury Charges.) Moreover, that same day, the court held a charging conference during which all parties had yet another opportunity to request changes to the proposed jury charges and verdict sheet. (See Tr. XIV.) In fact, the court provided the parties with three different versions of the jury charges in an attempt to incorporate the parties' requests. (See ECF Nos. 562, 563, Draft Jury Instructions; ECF No. 564, Jury Instructions.) Although defendants requested a number of other changes to the charges, they failed to request an instruction on duplicative damages for the fraud and conspiracy-to-defraud charges or object to its omission.

Defendants also had ample opportunity to submit proposed verdict sheets and object to plaintiffs' proposed verdict sheets, but again failed to do so until now. On April 4, 2011, prior to the commencement of this three-week trial, plaintiffs submitted their proposed verdict sheets, which contained a separate line for each award of damages for fraud and conspiracy to defraud. (ECF No. 536, Plaintiffs' Proposed Verdict Sheet.) No defendant submitted proposed verdict sheets, although they had been ordered to do so. (See ECF No. 495, Pretrial Scheduling Order ¶ 6(v).) After the final pretrial conference, the court directed the parties to meet and confer in an attempt to resolve any disputes regarding pretrial submissions--including jury instructions--and to agree on proposed verdict sheets. (See Minute Order dated 4/11/2011.) On April 15, 2011, plaintiffs filed a joint status report, noting that after conferring with counsel for the UH Defendants and Hershco, the verdict sheets had been modified, but that the UH Defendants and Hershco continued to object to the instructions regarding piercing the corporate veil. (ECF No. 544, Status Report dated 4/15/2011, at 3.) Olympia filed a letter on May 3, 2011, informing the court that it had no submissions regarding the jury instructions or verdict sheets, but it joined in the objections already made by the UH Defendants and Hershco. (ECF No. 550, Letter dated 5/3/2011.) Moreover, at trial, the parties again discussed changes to the proposed verdict sheets and submitted revised versions for the jury. (See Tr. XIV.) At no point did the UH Defendants, Hershco, or Olympia object to the separate damages lines for fraud and conspiracy to defraud on the verdict sheets.

Finally, after the verdicts were published by the court and before the jury was discharged, defendants had the opportunity to request clarification from the jury regarding what they now claim is a duplication of damages. In fact, at the request of the UH Defendants, the jurors were polled after the verdicts were published, but no request was made for clarification. (Tr. XVII at 4, 51.) Before the jurors were discharged, Hershco requested only that the jurors receive an instruction regarding communications with counsel. (Id. at 52.) After the jurors were discharged, defendants raised several matters to be addressed through post-trial motions. (Id. at 53-56.) At no point did the UH Defendants, Hershco, or Olympia mention the duplicative damages issue they now raise in the instant motions.

The court is unconvinced by defendants' arguments that no objection was necessary or, in the alternative, that the issue was preserved by moving to dismiss or moving for summary judgment on the conspiracy-to-defraud count. None of the defendants ever objected specifically to the charge regarding conspiracy to defraud; at most, all the parties discussed appropriate language for the charge with respect to the form of agreement among co-conspirators, and Olympia belatedly objected only to language regarding the extent of the knowledge element for fraud. (See, e.g., Tr. XIV 11-14; id. at 34-37 ("I didn't make a submission with respect to the charge . . . ." Mr. Grannis, counsel for Olympia, asked for "an instruction to the jury that says Olympia has to know [that statements] are fraudulent just like a direct participant.").)

Moreover, the issue raised in the instant motions is not whether the conspiracy-to-defraud charge should have been submitted to the jury. As the parties point out, the UH Defendants and Hershco sought dismissal and summary judgment on the conspiracy-to-defraud claim, which the court denied in the Memorandum and Order denying defendants' motions for summary judgment. (See ECF No. 485, Memorandum and Order dated 9/13/2010.) The court also acknowledges that in the Joint Pretrial Order, defendants raised the defense that there is no separate cause of action for conspiracy to defraud (see ECF No. 537, Joint Pretrial Order at 12, 14, 16), and the court agrees. The issue presented in the defendants' post-verdict motions, however, is separate and distinct: here, defendants question whether the award of damages for fraud and conspiracy to defraud was duplicative. Indeed, Olympia acknowledges that "[t]he question now before the Court is not whether conspiracy to defraud should have gone before the jury as a separate claim but how the jury verdict should be interpreted as written."

(Olympia Jury Int. Mem. at 3-4.) As participants in the drafting of the jury instructions and verdict sheets, defendants were on notice of the possibility that the jury would render its verdict as it did. Had defendants raised the question regarding duplicative damages before the jury was discharged, the matter could have been resolved. The issue, therefore, should have been raised before the jury was charged and the verdict sheets were presented or, at the very latest, after the jury returned with the award.

Defendants' "failure to raise a timely objection deprived the court and the parties of their most effective and efficient means of resolving the issue of whether their award was duplicative." Bseirani, 881 F. Supp. at 784-85. As such, the court finds that defendants waived any objection to the jury award as duplicative. See id.; Bseirani, 1997 WL 3632, at *2 (holding that defendant "had either to seek clarification from the jury or be held to have waived the argument that the damages are duplicative"); Metron, 189 F. App'x at 4 (holding that defendants waived any objection to duplicative damages by failing "to raise this issue in their request to charge or at the charging conference, or to lodge a timely objection, or to request that the court poll the jury").

2. Defendants Have Not Shown Duplicative Damages

Even in the absence of a waiver, the defendants have not shown that the damages are duplicative. It is well settled that "when a plaintiff seeks compensation for the same damages under different legal theories of wrongdoing, the plaintiff should receive compensation for an item of damages only once." Gentile v. Cnty. of Suffolk, 926 F.2d 142, 153 (2d Cir. 1991); Conway v. Icahn & Co., 16 F.3d 504, 511 (2d Cir. 1994). The court agrees with defendants that the conspiracy-to-defraud count "cannot have its own independent measure of damages." Hoeffner, 924 N.Y.S.2d at 377-78. "However, a jury may assess one amount of damages and divide that amount between two applicable counts." Galazo v. Pieksza, No. 3:01-CV-01589, 2005 WL 3312765, at *2 (D. Conn. Dec. 6, 2005); see also Gentile, 926 F.2d at 154; Bseirani, 881 F. Supp. at 786. "Where the jury has divided damages between two theories of liability[,] the awards are not duplicative." Galazo, 2005 WL 3312765, at *2.

In Gentile, for example, the Second Circuit found that defendants had not shown with "any degree of certainty" that damages awarded under both state and federal causes of actions were duplicative where "plaintiffs presented substantial evidence indicating that they suffered from multiple injuries." 926 F.2d at 153-54. The court noted that "defendants do not demonstrate that a jury's award is duplicative merely by noting that it allocated the damages under two different causes of action." Id. at 154. Although defendants argued that "the fact that the jury divided their award for each plaintiff into two equal parts . . . indicate[d] that the jury impermissibly compensated each plaintiff twice for identical injuries," the Second Circuit found that "it [was] equally conceivable that the jury . . . merely split the total amount equally between the state and federal causes of action in announcing their award to the court on the form submitted to it." Id. at 153-54. The Court, therefore, denied the defendants' motion to set aside that portion of the jury verdict as duplicative. Id. at 154 ("Under all the circumstances, we simply do not think that we would be justified in upsetting the jury's award in whole or in part.").

There are instances in which an award of damages may result in a finding of duplicative damages. In Conway, for example, the court found duplicate damages where the "theories of recovery were based on a single set of facts, . . . the economic loss sustained was predicated on those unitary facts" and "[t]here was but one injury suffered by [the plaintiff] and that injury gave rise to a single item of damages." 16 F.3d at 511-12. Similarly, in Bender v. City of New York, the Second Circuit observed that "[i]n some cases, seemingly duplicative damages made separately for overlapping causes of action or against different defendants have been sustained where it appeared that the jury intended to award the aggregate sum," but that "[t]here [was] no such indication in [the Bender] case" because the court determined that the aggregate award was "excessive." 78 F.3d 787, 794 (2d Cir. 1996).

The instant cases, however, are distinguishable.

Here, as in Gentile, plaintiffs submitted "substantial evidence indicating that they suffered from multiple injuries." 926 F.2d at 153. Specifically, plaintiffs presented substantial evidence of the following injuries: (1) damages suffered due to the over-appraisal of properties; (2) damages suffered due to abusive financing and lending practices; (3) excess closing costs; (4) past cost of repairs; and (5) future cost of repairs. (See generally Tr. XIII at 77-100 (presenting a summary of damages evidence at trial).) Unlike Conway, therefore, this is not a case in which plaintiffs suffered "but one injury." See Conway, 16 F.3d at 512.

Nor does the court find that the aggregate damages award for the fraud claims is excessive, as the Second Circuit did in Bender. See 78 F.3d at 794. Plaintiffs presented the testimony of appraisal expert Dominick Pompeo, who testified that plaintiffs' homes had been over-appraised at the time of closing. (See generally Tr. VII.) Specifically, Mr. Pompeo testified that, based on his retrospective appraisals of the plaintiffs' properties, the properties were over-appraised as follows: (1) 21 Marconi Place, Dewitt Mathis' home, was over-appraised by $133,000 (id. at 43-44); (2) 2126 Union Street, Miles and Lisa McDale's home, was over-appraised by $150,000 (id. at 49-50); (3) 2422 Dean Street, Charlene Washington's home, was over-appraised by $157,000 (id. at 51-52); (4) 249 Halsey Street, Mary Lodge's home, was over-appraised by $185,000 (id. at 56-57); (5) 557 Hancock Street, Sandra Barkley's home, was over-appraised by $124,000 (id. at 57-58); and (6) 1148 Halsey Street, Sylvia and Rodney Gibbons' home, was over-appraised by $114,000 (id. at 59-60).

In addition, at trial, all plaintiffs testified and presented photographs of the numerous problems they experienced with their properties. Miles and Lisa McDale had a flood in their basement, resulting in the loss of important papers, clothing, and other personal belongings; leaking radiators; cement crashing down from the ceiling above their entryway; water leaking from the upstairs bathroom into a light fixture; dangerous electrical wiring; clogged drainage pipes resulting in a raw sewage backup in the house; and a gap in the floor of their daughter's bedroom through which the light from the boiler room below could be seen. (Tr. II at 18-27; Pl. Ex. 2637.) Mary Lodge had water leaking into the house; holes in the floors and rotten wood floors hidden under the carpet; poor heating in the winter; cracked cement on the stoop; pipe bursts in the wintertime; improperly installed broken kitchen tiles; and rodent infestation. (Tr. III 58-65; Pl. Ex. 2637.) Sylvia and Rodney Gibbons had uneven and bumpy floors, later discovered to be due to drywall, cardboard, and other trash left underneath the carpets; leaning and leaky sinks; water leaking from the stoop and roof; drafty windows without appropriate screens; flooding in the backyard; rotted wood on the floors; improperly installed broken kitchen tiles; and raw sewage coming into the basement due to an old, backed-up sewage pipe. (Tr. IV 131-33, 144-456; Pl. Ex. 323; Pl. Ex. 2637.) Dewitt Mathis had water leaking into the basement; uneven and tilted stairs; raw sewage backing up into the trap door underneath the floor; problems with the electrical system; inadequate heating; and over 150 bags worth of trash and construction debris discovered underneath a layer of tightly packed dirt in his backyard. (Tr. IX at 183-196; Pl. Ex. 623.) Sandra Barkley had water collecting on the stoop of her house, which caused flooding underneath the stoop and rusting of the entrance door; rotted wood tiles falling from the top of the house; leaking radiators; inadequate heat; water leaking into the basement, which caused damage to valuables, clothing, and papers; water leaking into an electrical fixture; improperly installed broken kitchen tiles; leaking under the kitchen sink; and creaky, uneven floors, later discovered to be due to inadequate materials and faulty installation of the floors. (Tr. X 181-95; Pl. Ex. 2637; Pl. Ex. 89.) Finally, Charlene Washington had no heat in her apartment for approximately three weeks during the winter, during which she slept on the floor of her kitchen with the oven on and the oven door open; ceiling leaks; raw sewage in the basement, about three inches thick, which caused damage to clothes and papers; gas leakage; and approximately twenty holes in the wood of the floor, filled with debris. (Tr. XII at 56-68.)

Further, plaintiffs presented the testimony of construction expert Sirivishnu Khalsa, who testified about the estimated cost of repairing plaintiffs' properties using basic quality materials. (See generally Tr. VI.) According to his unrebutted testimony, the cost of repairs would be as follows:

(1) $72,005.50 for 1148 Halsey Street, Sylvia and Rodney Gibbons' home (id. at 105); (2) $57,214.75 for 21 Marconi Place, Dewitt Mathis' home (id. at 112); (3) $29,288.50 for 2422 Dean Street, Charlene Washington's home (id. at 117); (4) $52,120.00 for 2126 Union Street, Miles and Lisa McDale's home (id. at 120); (5) $49,583.00 for 557 Hancock Street, Sandra Barkley's home (id. at 124); and (6) $82,689.00 for 249 Halsey Street, Mary Lodge's home (id. at 129).

In light of this and other abundant evidence presented at the trial, the aggregate damages award to each of the plaintiffs was adequate, but not excessive. These cases, therefore, are distinguishable from Bender in that the court does not find the aggregate damages figure to be excessive and therefore duplicative.

Defendants "point[] to no evidence, other than the award itself, to support [their] claim of double recovery. By merely asking the court to draw from the jury award an inference of duplic[ation] the defendant[s] ha[ve] failed to sustain [their] burden." Galazo, 2005 WL 3312765, at *3 (citing Gentile, 926 F.2d at 154). The Second Circuit held that "defendants do not demonstrate that a jury's award is duplicative merely by noting that it allocated the damages under two different causes of action." Gentile, 926 F.2d at 154. But that is all the UH Defendants, Hershco, and Olympia have done here. Consequently, defendants have failed to show "with any degree of certainty" that the jury awards are duplicative. See id. at 153-54; see also Aldrich v. Thomson McKinnon Secs., Inc., 756 F.2d 243 (2d Cir. 1985) (finding that the jury meant to award the aggregate amount of damages); Galazo, 2005 WL 3312765, at *3 (finding that "the defendant has not supported his double recovery argument with any evidence," and therefore "the probabilities are balanced between the possibility that the jury duplicated awards or whether they merely split one award between two applicable claims" and "the court will draw an inference in favor of the jury verdict and the non-moving party" and find no duplication); Bseirani, 881 F. Supp. at 786-87 (denying motion for new trial or judgment as a matter of law where the "defendant has failed to establish with any degree of certainty that the instant jury awards were duplicative"); Bseirani, 1997 WL 3632, at *2 (affirming district court finding that defendants had not shown duplicative damages and noting that the mere "possibility of non-duplicative awards is enough to sustain the jury verdict").

The UH Defendants and Hershco argue that Gentile and other cases finding that a damages award was not duplicative are distinguishable because "[i]n each of those cases, the jury was either explicitly instructed not to award duplicative damages or was polled afterwards to determine intent" and "[h]ere, no such instruction was given, and no such poll was taken." (UH Reply at 4.) Defendants, however, should not now be heard to complain that a jury instruction regarding duplicative damages should have been given, or that the jury should have been polled to determine intent, when defendants failed to propose such an instruction despite numerous opportunities to do so before and during the three-week trial, and failed to request that the jury be polled to clarify what defendants now claim is a duplicative damages award.

Further, although an instruction explicitly addressing duplicative damages was not read to the jury, the charges clearly instructed the jury on the measure of damages to be assessed as to the fraud claims together, instead of providing separate instructions for individual measures of damages for fraud and conspiracy to defraud. (See ECF No. 564, Jury Instructions at 40.) Even now, defendants cannot establish that the damages awarded were duplicative rather than allocated among the multiple injuries presented by plaintiffs at trial. See Martinez v. Port Auth. of New York and New Jersey, 445 F.3d 158, 161 (2d Cir. 2006) ("Although it would have been preferable had the District Court specifically instructed the jury to avoid duplicative damage awards in this case, defendants have failed to establish 'with any degree of certainty' that such double-counting actually or likely occurred in this particular case." (quoting Gentile, 926 F.2d at 154) (footnote omitted)).

For the foregoing reasons, defendants' motions for interpretation of the jury verdict as awarding duplicative damages are denied.

B.Incorrect Entities on Verdict Sheets

The UH Defendants and Hershco also assert that "the wrong entities were placed on the verdict sheet." (UH Jury Int. Mot. at 4.) Specifically, the UH Defendants and Hershco argue that "all three 'United Homes' entities . . . for all six plaintiffs" were included on the verdict sheets even though "each transaction involved one or two of the entities, but in no case all three." (Id.) Accordingly, these defendants contend that "the uninvolved entity should not have been on the verdict sheet for that plaintiff." (Id.)

Plaintiffs oppose the "belated" motion concerning the entities on the verdict sheets, arguing that "[t]he jury found that all of the defendants engaged in a conspiracy to defraud each one of the individual plaintiffs." (Pl. Jury Int. Opp'n at 8.) Further, plaintiffs argue that "'United Homes' was the trade name for [all] companies," and that there was "ample evidence to support the jury's finding that all the defendant companies were utilized by Yaron Hershco as a single entity to perpetrate his fraudulent property-flipping scheme . . . ." (Id. at 9.) Therefore, plaintiffs argue, "there is a factual basis to hold each company liable for participation in the conspiracy to defraud every plaintiff and to award punitive damages against each company for each plaintiff." (Id.)

In response, the UH Defendants and Hershco argue that "[t]he verdict's special interrogatories concerning the pierce-the-veil claims cannot reasonably be read to support a judgment against an entity that was not involved in a particular transaction." (UH Reply at 6.) The UH Defendants and Hershco argue that the piercing-the-corporate-veil questions were directed at determining the liability of Hershco, and that "[n]othing in these special interrogatories can be read as suggesting the jury made any finding about the entities' activities, that it found ...


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